Good choice
The procurement plan includes the following procurements:
→ expensive unusual/unique goods, works and services (hereinafter, GWS), whose “fair” price is difficult to calculate, or
→ GWS that are constantly/massively needed and can be a source for constant allocation of funding, or
→ GWS that are important for the State and for whose acquisition substantial public funds can be allocated.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
1
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Preliminary preparations
The customer, aware of the planned procurement and/or the total volume of its funding, informs the “loyal” contractor in advance about the necessary GWS so that the latter has enough time to get prepared for the tender.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
2
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New organization
In order to participate in the tender, a new organisation is established, whether real (which is able to supply the GWS procured) or shell (which exists only on paper); it is ready to follow the instructions of the customer concerning its participation in the tender and pay the “corruption” remuneration.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
3
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Revolving door
The procurement procedure sees the participation of:
→ an organisation, where an official (-s) of the customer was (were) previously employed or which he/she (they) owned/founded, or
→ an organisation, where an official (-s) of the customer got employed,
which is ready to follow the instructions of the customer concerning its participation in the tender and pay it “corruption” remuneration.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
4
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Reliable partner
An organisation which has not been associated with the customer but is known to its officials through other tenders for the supply of the same GWS is engaged in the procurement procedure; it is ready to follow the instructions of the customer concerning its participation in the tender and pay it “corruption” remuneration.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
5
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Collusion with existing organizations
Using positive and negative incentives, the customer reaches an agreement on interaction with the existing market actors that are not formally controlled by it and are ready to follow the instructions of the customer concerning their participation in the tender and pay it “corruption” remuneration.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
6
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Sham pool
A group of “loyal” contractors is created to participate in the tender; it includes the companies that are affiliated to each other and are actually the “avatars” of the same “loyal” contractor.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
7
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Real pool
A group of “loyal” contractors is created to participate in the tender; it includes real market actors that compete with each other are ready at their own initiative or at the initiative of the customer to collude and to determine in advance the winners of the bid. In certain cases, the winning organisation submits bids on behalf of all participants of the pool thereby minimizing the cost of participation in the tender for them.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
8
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Loyal specialised organisation
In order to carry out procurement, a single specialised organisation is established in the interest of a certain group of companies. This specialised organisation conducts all procurement procedures while the companies pay it certain remuneration. The persons associated with some managers of the group of companies are appointed as the managers of the specialised organisation.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
9
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Loyal assessment
In order to conduct the compulsory assessment in the framework of the procurement, an organisation which is loyal to the customer is engaged; it can either turn a blind eye on the flaws of the GWS proposed by the “loyal” contractors or focus its attention on the real or contrived flaws of the GWS of the “disloyal” participants.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
10
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Loyal construction supervision
In order to ensure compulsory construction supervision with regard to the works/services provided by the “loyal” contractor, an organisation controlled by the contractor or the customer is established or engaged.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
11
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Loyal review of design estimates
In order to ensure a favourable outcome of either the review of the estimated cost or examination of project documentation or audit of turnkey procurement proposals for the “loyal” contractor, informal relationship with the organisations that provide relevant services is built.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
12
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Loyal external audit
In order to conduct compulsory external audit, and organisation controlled by the contractor or the customer is established or engaged.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
13
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Loyal digital trading platform
The customer either develops informal relationship with the digital trading platform where the procurement is organised or, more rarely, uses the platform which is totally controlled by it to carry out procurement.
Этап 1. ПОДГОТОВКА И ПЛАНИРОВАНИЕ ЗАКУПКИ
14
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Benefits for the “loyal” contractor
Beyond the procurement procedure, additional benefits are provided for the “loyal” contractor that enhance its competitiveness, including:
→ the possibility to swiftly get all necessary authorizations, whereas its “disloyal” competitors encounter difficulties in this process,
→ subsidized loans, etc.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
15
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Execution of works in advance by the contractor
At the moment of procurement, the works procured are already fully or in part executed by the “loyal” contractor (or by the organisations controlled by it).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
16
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Wrong procurement subject
At the moment of procurement, the works procured are already fully or in part executed by the customer (or by the organisations controlled by it).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
17
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Execution of works in advance by other organisations
At the moment of procurement, the works procured are already fully or in part executed by other organisations (for instance, in the framework of previous procurements).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
18
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Substitution of procurement by subsidies
The customer does not conduct the procedures in accordance with the procurement legislation; instead, it grants a subsidy to the “loyal” organisation which is not subject to the procurement legislation; after that, the organisation conducts procurement in the interest of the initial customer in a much less regulated format.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
19
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Substitution of procurement procedures by conclusion of civil law contracts
The customer concludes a civil law contract for the supply of GWS instead of holding procurement procedures. Furthermore, it is often the case that a contract for the provision of works/services whose provision is already included in the professional duties of the employees of the customer is concluded.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
20
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Substitution of a procurement conducted in accordance with more severe legal requirements by a procurement under softer regulation
The customer creates the conditions in which the procurement is conducted in accordance with softer legal requirements (for example, if more severe requirements are applied to public bodies, the procurement in the interest of the public body is conducted by a subordinate organisation).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
21
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Substitution of a procurement method
A competitive procurement method is substituted by another that provides the customer with more opportunities for “manipulating” the procurement in the interest of the “loyal” contractor (for example, the substitution of an electronic auction by an open competition by replacing the subject of the procurement allows the customer to adjust the non-price criteria of assessment of bids to a certain contractor).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
22
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Request for commercial proposals of “loyal” organisations
When calculating the initial maximum contract price (hereinafter, the IMCP) by comparing market prices, the customer sends the requests for commercial proposals only to the organisations that are ready to propose excessive prices thereby ensuring a high average price and, consequently, the IMCP.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
23
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Substitution of the subject of procurement
The customer substitutes the subject of procurement that implied the use of other methods of calculation of the IMCP with the subject that allows comparing market prices in the procurement documentation, which provides room for “manipulating” the IMCP.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
24
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Multiple requests for commercial proposals
If the high IMCP that the customer needs is not ensured by comparing market prices, the customer tries to reach an agreement with the organisations that proposed “too low” a price or to exclude their participation; after that, the customer slightly amends the technical requirement and sends the request for commercial proposals one more time.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
25
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Incorrect calculation of key indicators
In using the method of design estimate or of expenses to calculate the IMCP, the customer uses an excessive value of relevant indicators (quantity of goods, scope of work etc.) with the aim to increase the cost of works and, consequently, the IMCP.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
26
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Overestimation of certain elements of the subject of procurement
In using the method of design estimate or of expenses to calculate the IMCP, the customer overestimates additional expenses rather than the key indicators (quantity of goods, scope of work etc.), i.e. the price of the elements of the equipment that is the subject of the procurement, the wage rate for the workers involved in the execution of the contract, etc.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
27
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Inclusion of unnecessary costs in the calculation
In using the method of expenses to calculate the IMCP, the customer includes the positions whose content requires additional clarification in the project calculation without analysing the rationale for including these positions and the estimate of their cost, for example, the expenditure on support advice and other services, whose cost can be compared to or even exceed the cost of the main GWS procured.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
28
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Overestimation of the marginal prices in defining the target costs
If the customers must set a price cap with regard to the GWS procured, the customer can deliberately include excessive marginal prices in the relevant document, using different sources for defining the average prices.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
29
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The use of the highest maximum selling prices of life-saving and the most important medicines
When procuring life-saving and the most important medicines, whose maximum selling prices are defined by the State and can differ depending on the manufacturer and form of release, the customer can intentionally choose the most expensive items in the relevant public register of prices.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
30
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Undue non-application of coefficients
When employing the method of design estimate to calculate the IMCP, the customer does not use decreasing coefficients or uses multiplying coefficients with regard to the estimates defined in the dedicated compendia of estimate standards for different types of work without proper justification.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
31
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Selection of a more expensive method for acquiring the right to use property
When conducting the procurement whose subject is the right to use property, the customer chooses a more expensive method for acquiring such right, for instance, the rental of equipment rather than its purchase.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
32
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Procurement of GWS with excessive specifics
The subject of the procurement are the GWS whose specifics are of no interest to the end user or whose qualities will not be required in real conditions, which allows increasing considerably the IMCP. In using this practice, the customer gains the opportunity to generate additional “proceeds of corruption” due to the supply of the GWS whose quality is actually lower than the one stated in the procurement documentation.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
33
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Procurement of unnecessary GWS
The subject of the procurement is an excessive amount of GWS; as a result, the surplus is either not used or, conversely, is used in unreasonably large volumes to conceal the excessive volume of procurement. In certain cases, in order to obtain additional “proceeds of corruption” the excessive GWS can be sold to associated organisations to ensure their subsequent participation in the procurement of relevant GWS also at considerably lower prices to secure their win.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
34
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Overstatement of advance payment
The customer sets an unreasonably high advance payment so that it is subsequently credited to deposit accounts by the “loyal” contractor and generates additional gains. This practice can be used at the stage of contract execution: in this case, a gradual advance payment is made through additional contracts if the works are executed for the amount of the previous advance payment without their actual execution.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
35
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Sole source procurement based on legal acts
If the legislation provides for the possibility to procure certain GWS from a sole source based on a legal act, the customer, using its lobbying capabilities and/or misleading arguments, promotes the adoption of such legal act with regard to the organisation which is “loyal” to the customer.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
36
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Fragmentation of procurement
If the legislation provides for the possibility to procure GWS from a sole source in the event that their cost is below a certain threshold, the customer artificially divides the total amount of the necessary GWS into parts the price of each of which does not exceed the threshold and conducts procurement for each part of the GWS.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
37
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Procurement outside emergency situations
If the legislation provides for the possibility to procure GWS from a sole source for emergency response or in other emergency situations, the customer justifies the procurement without any competition procedures by respective conditions in their effective absence.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
38
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Procurement held long after the emergency has arisen
If the legislation provides for the possibility to procure GWS from a sole source for emergency response or in other emergency situations, the customer justifies the procurement without any competition procedures by respective conditions in spite of the fact that the procurement is held long after the emergency or other emergency situation has arisen where the remedy is rather unlikely.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
39
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Procurement of goods/works inappropriate for the remedy of emergencies
If the legislation provides for the possibility to procure GWS from a sole source for emergency response or in other emergency situations, the customer justifies the procurement without any competition procedures by respective conditions in spite of the fact that the procured GWS are inappropriate or excessive from the point of view of the remedy of emergencies of other emergency situations.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
40
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Prerogative of public bodies and subordinate organisations
If the law provides for the possibility to procure GWS without competitive procedures under certain conditions only from public bodies or the organisations subordinate to them, the customer justifies the sole source procurement by the relevant reasons, having no real grounds for the impossibility (inappropriateness) of using other means to identify the contractor. One of the variants of this practice consists in granting the only organisation the exclusive right to supply certain GWS in a situation where there is a competitive market (for example, the use of discretionary power or lobbying to adopt the relevant legal act at the level of a territorial entity of the country).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
41
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Procurement of cultural and recreational events
If the law provides for the possibility to procure GWS form a sole source to acquire tickets to cultural and recreational events, the customer justifies the procurement without competitive procedures by the relevant grounds with regard to the organisation of any recreational events and not only the acquisition of tickets.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
42
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Procurement from small and medium enterprises / socially-oriented organisations
If the law provides for the obligation to conduct a certain part of procurement from small and medium enterprises or socially-oriented NGOs, the customer, having a “loyal” organisation which falls under this category at its disposal, procures such GWS from these organisations that:
→ due to their complexity/specific character cannot be supplied by “ordinary” organisations falling under the abovementioned categories, but can be supplied by the “loyal” organisation, which allows eliminating competition;
→ are normally supplied by major “disloyal” organisations, which allows avoiding competition and secure the win of the “loyal” organisation.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
43
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Prequalification with excessive demands
In conducting the prequalification in accordance with the competitive procurement method, the customer makes unfounded demands to the bidders (for instance, the possession of material resources by the contractor that are not directly related to the subject of the procurement).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
44
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Centralisation of procurement
The customer procures certain GWS through a single coordinating public body, preventing organisations from making these procurements autonomously, which allows securing the procurement of a considerable amount of GWS from the “loyal” contractor also at excessive tender prices.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
45
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Non-standard names of GWS
When publishing the information about the procurement on a digital procurement platform, the customer uses non-standard names/non-obvious synonyms of codes of GWS with the aim to complicate the search of procurement announcements for potential “disloyal” bidders.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
46
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Tight deadline for bids
The customer sets too tight a deadline for making bids or such a deadline that falls on “inconvenient” periods such as public holidays or the end of the year.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
47
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Non-standard formats of the procurement documentation
When publishing the information about the procurement on a digital procurement platform, the customer uses non-standard formats of the files of the procurement documentation such as those that are impossible to access without dedicated software or that have text fragments in an unreadable graphic format etc.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
48
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Confusing requirements
The customer includes complex or even contradicting requirements to the subject of the procurement in the procurement documentation, which increases the likelihood of inconsistencies or formal errors in bids submission by potential “disloyal” bidders.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
49
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Hampered bids submission
When conducting a procurement procedure on the digital procurement platform controlled by the customer or the persons associated with it, obstacles to the submission of bids by the “disloyal” bidders are posed. These are related, for instance, to the difficulties in entering data, attaching documents etc. Problems can be equally encountered in the submission of documents in person (for example, difficulties in getting a pass to enter the office of the customer).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
50
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Unrealistic deadlines for executing the contract
The customer sets too tight a deadline for delivering on the contract; as a consequence, the “disloyal” bidders do not bid for the tender knowing that they will be unable to execute the contract on time. Hence, the competition is limited in favour of the “loyal” contractor who can deliver on the contract by the deadline, for instance, because the works that constitute the subject of the procurement are executed in advance.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
51
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Unreasonably low IMCP
The customer sets too low an IMCP which is unprofitable for the fair market participants; as a result the “disloyal” organisations do not bid for the tender. In this context, the customer tries to ensure that the “loyal” contractor has the necessary experience in order to secure its participation in the future more “expensive” tenders or counts on a compensation of the low IMCP by concluding additional contracts with the “loyal” contractor.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
52
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Insufficiently detailed description of the subject of the procurement
The customer includes unclear requirements in the procurement documentation, which makes it impossible to define the final amount of GWS procured, their important specifics and, consequently, the price of the contract; as a result, the “disloyal” organisations decide not to bid for the tender.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
53
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Large amount of the tender/contract security
The customer sets too high an amount of the tender and/or contract security; as a consequence, the “disloyal” contractors that have no possibility to withdraw this considerable sum from the operating assets for a long period of time do not bid for the tender.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
54
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Lack of objective assessment criteria
The customer leaves room for subjective assessment of bids: for instance, it does not indicate the number of points assigned for a certain criterion value, does not set proportional dependence between the quantities of the points assigned and the information submitted etc.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
55
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Procurement of goods of certain manufacturers
The procurement documentation drafted by the customer includes the requirements which only a specific product meets:
→ by indicating a specific trademark/brand, or
→ by providing the details of the requirements so that they can be met only by the products of a certain manufacturer, or
→ by providing the details of the requirements so that they can be met by several products, however one of them is knowingly cheaper and its availability provides the organisation that owns it with cost advantages.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
56
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Consolidation of procurement
The customer consolidates in a single procurement different GWS that cannot be fully supplied by the “disloyal” contractors due to the lack of resources, narrow specialization etc. The large amount of security of this consolidated contract which is often unbearable for the direct manufacturers of the goods procured is an additional obstacle. This practice also allows setting an excessive IMCP.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
57
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Requirements to use specific resources
The procurement documentation drafted by the customer includes the requirements to use specific resources in delivering on the contract: materials, software, infrastructure sites etc. of which only the “loyal” contractor or a very limited number of potential bidders dispose.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
58
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Requirements to have licences, certificates, awards, membership in professional associations
The procurement documentation drafted by the customer requires that a potential contractor has specific licences, certificates, awards, membership in professional associations of which only the “loyal” contractor or a very limited number of potential bidders dispose. In addition, the licence/certificate can be issued only by a certain organisation controlled by the customer that hampers in every way its issuance to the “disloyal” bidders.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
59
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Requirement for the contractor employees to have specific characteristics
The procurement documentation drafted by the customer requires that the full-time employees of a potential contractor have specific professional experience, academic degree, membership in commissions, licences etc. which the “disloyal” bidders are unlikely to have.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
60
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Requirement to have specific experience
The procurement documentation drafted by the customer includes as a requirement or as a determining element of scoring for a potential bidder to have specific experience in supplying GWS which only the “loyal” contractor has to the extent needed.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
61
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Neglecting the experience of “disloyal” bidders
In defining the criteria for bids assessment, the customer sets such requirements to the experience that allow eliminating some “disloyal” bidders, including the “limit value” of experience or detailed requirements to the experience (for example, experience in providing works by a certain deadline when these works have knowingly never been provided by the “disloyal” contractor).
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
62
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Unique experience
The customer ensures that the “loyal” contractor wins a prior tender, small and unattractive to the fair market participants, which allows the latter to gain unique experience; after that, the customer carries out a large procurement where this experience is the decisive assessment criterion.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
63
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Requirements to the specifics of goods that can be verified only if they are available
The customer sets such requirements to the specifics of the goods procured that can be verified only if the contractor disposes of them and/or the findings of their testing.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
64
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“Correct” formula
The customer draws up a formula to determine the best offer so that the calculation of points results in the “loyal” contractor, given its characteristics, having the best result in any or almost any case. The “disloyal” bidders can compete with it only if they decrease considerably the price, which will be knowingly unprofitable for them.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
65
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Procurement with fictitious elements
The customer includes in the subject of the procurement the GWS whose provision is not subsequently foreseen. The “loyal” contractor who is aware of that gains the opportunity to decrease the offered contract price by the price of the fictitious elements thereby gaining a competitive advantage. After the execution of the contract to the extent necessary to the customer, an agreement to break the contract is signed with the contractor on the grounds that “there is no need” for the GWS that have not been provided.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
66
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Resource saving
The customer informs the “loyal” contractor in advance that it will provide it with the resources necessary for executing the contract (equipment, materials etc.), which the “disloyal” bidders would have to acquire on their own; this allows the “loyal” contractor to decrease the price of the contract by the cost of these resources.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
67
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GWS saving
The customer informs the “loyal” contractor in advance that it already has some of the GWS that should be provided, which allows the “loyal” contractor to decrease the price of the contract by the cost of these GWS.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
68
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Execution of the contract by the customer
The customer agrees with the “loyal” contractor in advance that the contract will be effectively fully or partly executed by the customer itself, which allows the “loyal” contractor to considerably decrease the price of the contract.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
69
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False sense of competition
The organisations of the real and sham “loyal” pool bid for the tender with the winning bidder being defined in advance and the other bidders acting as agreed to ensure its win. Therefore, a sense of competition is there to conceal the misconduct from the supervisory authorities.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
70
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Tracing of participants on controlled digital trading platforms
The customer, having organised informal interaction with a digital trading platform, traces the bids of the “disloyal” bidders and, taking into consideration the conditions they propose, informs the “loyal” contractor about the need to amend its bid.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
71
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A “cascade of prices”
The procurement sees the participation of the organisations of a real or sham “loyal” pool: the first organisation proposes the highest price and is in line with the non-price criteria to the highest extent; the second one proposes a lower price and slightly worse quality features etc. If there are no competing “disloyal” bidders, the winner will be the organisation that proposed the highest price and the best quality features. If there is a “disloyal” bidder who proposes a price which is not the highest, the winner will be the “loyal” organisation who proposed even a lower price or better non-price criteria.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
72
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A “ram”
In a procurement auction which sees the participation of the organisations of a real or sham “loyal” pool, two such organisations trade, reducing the price to a level inacceptable for the “disloyal” bidders. Before concluding the auction a third “loyal” bidder proposes a price that is higher than the one proposed by the two first participants but lower than the one proposed by the “disloyal” bidders. The bids of the organisations that proposed the two lowest prices are declined on formal grounds after the scrutiny of the second parts of the bids, so the third “loyal” organisation wins the bid.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
73
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A second quotation request
In carrying out procurement in the form of a quotation request, the customer cancels the procedure after having received the proposals of the “disloyal” bidders. Having the information on the prices which the competing “disloyal” organisations are ready to propose, the bid of the “loyal” organisation is amended so that to provide it with a competitive advantage; after that a second quotation request is made with the “loyal” organisation that proposed the best price winning the bid.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
74
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Blocking of the “disloyal” contractor
In conducting two or more procurements of the same GWS, the “disloyal” contractor is allowed to win the first bid, decreasing the price in the auction below the cost effective threshold. After that, the “disloyal” contractor, running the risk of being inserted in the register of disreputable suppliers if it refuses to conclude the unprofitable contract, agrees not to participate in the subsequent procurements and the auction is declared failed. As a consequence, the “loyal” contractor will not have any competitors for the subsequent tenders (a series of tenders) that will also have a higher price.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
75
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Cancellation of procurement before the deadline for submitting bids
If the law provides for the possibility to cancel procurement before the deadline for submitting bids, the customer uses it when the win of a “disloyal” bidder becomes evident. Taking into consideration the fact that the term for such cancellation is generally limited, the customer can complicate the practice, for instance, by making slight amendments to the procurement documentation, which automatically leads to the extension of the deadline for submitting bids; as a result, the customer will have enough time to cancel procurement without violating the term set by the law.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
76
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Cancellation of procurement due to force majeure
If the law provides for the possibility to cancel procurement due to force majeure, the customer uses it when the win of a “disloyal” bidder becomes evident. In this context an unreasonably broad interpretation of the force majeure notion can be employed.
Этап 2. ОРГАНИЗАЦИЯ И ПРОВЕДЕНИЕ ЗАКУПКИ
77
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Substitution of the bid after the winner is defined
After having received all bids and formally defined the winner, the customer substitutes the bid of the “loyal” contractor so that it beats the offer made by the winner.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
78
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Convincing of the “disloyal” contractor to change its mind
If a “disloyal’ contractor wins the bid, the customer makes an attempt to reach an agreement on “corruption interaction” with it using:
→ positive incentives (for instance, it promises to secure the winning of its subsequent tenders), or
→ threats (it hampers the acceptance of works up to a complete refusal to accept them and incretion of the organisation in the register of disreputable suppliers, complicates the participation of the contractor in future tenders etc.).
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
79
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Procurement of materials from the customer
The customer agrees with the winner of the bid that the latter will buy the materials/equipment necessary to execute the works from a natural person associated with the customer thereby creating the opportunity to have additional proceeds of corruption.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
80
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Change of the terms of the contract
After the win of the “loyal” contractor the customer amends the terms provided for by the draft contract that was a part of the procurement documentation, changing them in the interest of the contractor, for instance, by easing or excluding possible sanctions for undue execution of stages of works, failure to respect deadlines etc.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
81
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Conclusion of additional corrective contracts
As the initial terms were unfavorable so that to ensure the win of the “loyal” contractor (low IMCP, unrealistic deadlines) the customer amends them by concluding with it additional contracts.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
82
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Conclusion of additional sham contracts
The customer concludes additional sham contracts with the “loyal” contractor concerning the execution of works that in fact will not be executed thereby generating additional proceeds of corruption.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
83
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Subcontracting of all works
The “loyal” contractor that won the bid does not execute it alone, subcontracting all works and retaining a certain percentage of the payment (it is the “general contractor-interlayer”). At the same time, the real suppliers can compose a “loyal” pool which works with the general contractor rather than with the customer.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
84
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Execution of a part of works by the “loyal” contractor
The “loyal” contractor that won the bid either executes itself only a part of works, whose cost does not correspond to the part of the payment it takes under the contract, or reserves for itself the corruption-prone works (procurement of equipment and materials etc), whereas the other works are subcontracted. This practice is used to ensure that the “loyal” contractor gets additional proceeds of corruption thanks to the overestimation of the real cost of works by the amount of its “indirect participation” in their execution.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
85
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Sham subcontract
The “loyal” contractor who won the tender formally engages subcontractors to execute the works; however, in practice, it does all or almost all the works itself. The practice is used to redirect the payment for the contact also with the aim to pay kickbacks to the customer.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
86
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Subcontracting of works to the “loyal” organisations
The “loyal” contractor who won the tender engages subcontractors from the “loyal” pool to execute the works. The practice is used to maintain the “loyalty” of the organisations that did not win the tender within the current procurement procedure in order to use them in the future.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
87
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Non-application or easing of sanctions
In the event that the “loyal” contractor fails to deliver on the terms of the contract the customer either does not impose the sanctions provided for by the contract on it or unduly eases them; in some cases it can unduly write off the penalties (fines, penalty fees). The practice can be used also with respect to the “disloyal” contractor that won the tender: in this case, the customer demands that the contractor pays “remuneration” for the non-application or easing of sanctions.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
88
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Acceptance of works without any further action on their completion
Being aware of the fact that the works were not completed or were poorly executed, the customer nevertheless signs the certificate of the acceptance of works of the “loyal” contractor; any actions to complete these works or eliminate the violations committed are not undertaken.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
89
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Acceptance of works and subsequent procurement of repair works
Being aware of the fact that the works were not completed or were poorly executed, the customer nevertheless signs the certificate of the acceptance of works of the “loyal” contractor; after that it conducts new procurement of repair works whose subject is, in fact, the elimination of the defects of the works executed under the previous contract.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
90
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Acceptance of works and subsequent procurement of further works
Being aware of the fact that the works were not completed or were poorly executed, the customer nevertheless signs the certificate of the acceptance of works of the “loyal” contractor; after that, it conducts new procurement whose subject is the continuation or development of the project implemented under the previous contract. In practice, the new procurement is aimed, in particular, at eliminating the defects of the works executed under the previous contract.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
91
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Acceptance of works and subsequent execution of works by the customer
Being aware of the fact that the works were not completed or were poorly executed, the customer nevertheless signs the certificate of the acceptance of works of the “loyal” contractor; after that it completes the works that were not carried out or conducts the repair works to eliminate the defects, using its own resources (the resources of subordinate organisations).
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
92
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“Snowball”
Being aware of the fact that the good procured was not delivered and/or the property was not put into operation, the customer nevertheless signs the relevant acceptance certificates and then covers the maintenance works for this property.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
93
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Termination of the contract by agreement of the parties
In the event that the “loyal” contractor is incapable of delivering on the terms of the contract and it is impossible to accept the works that were not completed/fully completed, the customer decides to terminate the contract by agreement of the parties, which allows the contractor not to be included in the register of disreputable suppliers and have the possibility to participate in future procurements.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
94
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Change of the method of procurement by terminating the contract
The “loyal” contractor wins the first tender due to a substantial reduction of the price unprofitable for the other bidders. Immediately after the winner is defined, the contract concluded with it is terminated by agreement of the parties, and the customer announces a new tender for the same GWS in accordance with a different tender procedure which secures the win of another “loyal” contractor, as the customer can adjust the second tender to a certain contractor, knowing the potential competitors and the content of their proposals based on the first tender.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
95
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“Bold” second procurement
Immediately after the procurement is concluded, the customer announces a new tender under a different title but with the same or almost the same content. The “loyal” contractor that executed the contract in the framework of the first tender has a competitive advantage over the “disloyal” bidders either due to the necessary experience which is among the criteria established by the customer for assessing the bids for the second tender or due to its awareness of the fact that the price can be considerably decreased since part of the works procured under the second tender has already been executed in the framework of the first one.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
96
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Sham first procurement
In the framework of the first procurement, the customer ensures that the works that have not been executed by the “loyal” contractor are accepted. After that, the customer conducts a second, more expensive procurement with the same or almost the same content, where the experience in executing similar works is the decisive criterion for assessing the bids. As a result, the “loyal” bidder that formally acquired this experience under the first procurement has the decisive competitive advantage and actually executes or completes the works under the first contract when carrying out the second one.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
97
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“Contribution” of the contractor
In the framework of the first procurement, the “loyal” contractor wins the tender by considerably reducing the price and executes a part of works at its own expenses. After that, the customer announces a new, more expensive procurement with the same or almost the same content, where the experience in executing similar works is the decisive criterion for assessing the bids. As a result, the “loyal” bidder that formally acquired this experience under the first procurement has the decisive competitive advantage, and its “financial losses” from decreasing the price of the first contract are compensated by the excessive cost of the second one.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
98
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Deception of subcontractors
The “loyal” contractor that won the bid engages subcontractors thereby achieving fully or in part the necessary results of the works; then, it announces its insolvency and does not pay for the works carried out by the subcontractors. After a while, the customer conducts a new procurement with the same amount of works and price which sees the participation of another “loyal” contractor that has a competitive advantage consisting in the works executed by the subcontractors under the first contract.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
99
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Use of recycled products
The “loyal” contractor wins two contracts: the first one is about recycling certain property, while the second one is about providing specific goods. When delivering on the first contract, the contractor does not fully recycle the property (some of its elements are extracted and conserved) or does not recycle it at all; under the second contract, it supplies the property or its separate elements that have not been recycled as if they were new goods.
Этап 3. ИСПОЛНЕНИЕ КОНТРАКТА
100
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